June has always been a special month for my family. It’s the month of my parents’ birthdays (they are deceased now) and, of course, Father’s Day. While I’m not known as the family baker, each year I made my dad red wine biscotti (aka “the ugliest cookies in the universe”… thanks sisters who speak the truth!) and gave him a nice bottle of red wine. A very different Bumstead family tradition started one June, when my dad asked me to work with him and mom on their retirement and estate planning. My first thought was: “I guess the serious talks about sex, drugs and rock ‘n roll are over.”

Retirement and Estate Planning: Dad’s Long View

Bob Bumstead made it a point to talk to his family about retirement and estate planning for their long term welfare.

This request for a retirement and estate planning discussion with my father, the breadwinner, brilliant engineer and mathematician, was about 28 years ago. I had graduated from college, proved myself a strong worker, and happened to have landed a job in the financial services industry. Furthermore, I was not an investment guru, estate or retirement planner. In fact, I was a 25-year-old marketing communications and public relations professional. However, working in the financial, estate and retirement planning industry and having access to very smart retirement and estate planning professionals made my learning curve shorter than most. My dad, nearing 50 years old, foresaw something many other parents don’t or won’t. He knew that someone in our family, other than my mother, had to know about their finances. From their expenses, investments, retirement accounts, to how they wanted retirement and estate planning to roll out in the coming years.

Clearly, my father was an anomaly in the best of ways. It was a surprise that in this parent/child relationship related to finances that he came to me. I am but one of his 4 daughters. It was an honor to be entrusted with such important, personal, financial, retirement and estate planning information and responsibilities. Plus, he did it during a generational time when it was inconceivable for an “old-school” father to bring in a “child” to talk about retirement, estates, wills, heirs, healthcare proxies, power of attorney. He did it “way back” in the 1990’s.

Sadly, the reality of the “silence of parents” around family discussions on retirement and estate planning continues to be all too real. From a 2017 MarketWatch article, How to Talk to your Parents about their Estate Without Seeming like a Greedy Jerk, 34% of parents haven’t had a detailed conversation with their adult children about their living expenses in retirement. A whopping 43% of parents said they haven’t had detailed discussions about their long-term-care or estate plans. It’s time to get talking!

A New Family Tradition is Born: A Focus on Estate Planning

What happened after that first talk about finances, retirement and estate planning? I sat in on meetings my parents had with their financial adviser. I listened to the recommendations about various investment strategies that depended on their age, retirement horizon, and risk tolerance. In their later 50’s, as my father neared retirement, my parents started to change their investment volatility and risk tolerance. They decreased risk via a variety of investment vehicles in their overall portfolio to help secure a strong retirement and estate planning platform.

My father retired around the year 2000. He’d still take on freelance consulting and teaching positions from time to time. This combination of investment strategy changes plus some work made it so my parents were positioned well to handle the stock market crash of 2008. Plus, we brought my husband, Paul, into the process to support me, my sisters, and my parents on this journey. They trusted Paul. It helps that he also happens to be a brilliant engineer, mathematician, and professor, as well as a serious and disciplined investment guy.

After getting to know their financial and investment picture, my parents asked me to meet with their legal teams on estate planning and long term care. This step was critically important, more for me and my siblings than to them. Our team of attorneys, along with our adviser and accountant whom we kept in the loop, helped us to develop an estate and long term care plan that turned out to be a blessing later.

Long-Term Care: A Key Part of the Estate Plan

Back in the 1990’s, long term care insurance was in its infancy yet my parents saw the value of it as they began to learn more about Medicare versus Medicaid. My dad’s work offered a group long term care insurance program. He also purchased individual coverage for himself and my mom. It wasn’t cheap. My parents were adamant that they relieve some future burdens that could be placed on their 4 daughters. They ensured that there would be funding for home-care, assisted living or nursing home expenses if they should need it.

Today, you can’t buy the kind of coverage my parents purchased due to the pricing and underwriting requirements for long term care insurance. At first glance, their long term care insurance policies may not have “paid off”. My parents paid more in premiums than they ultimately received in benefits. One reason is that my mother died fairly quickly from lung cancer and didn’t use her portion. However, my dad, who fell into dementia and Alzheimer’s, used a great deal of his benefits. These benefits were extraordinarily helpful to our family as my dad had to be moved from his home to various assisted living/memory care facilities, and finally to a nursing home.

Trusts, Estate Planning and Executors, Oh My!

Just as important as long term care planning, learning how estate planning tools such as trusts can shield one’s home and property for the safety of your family finances is critical. A trust is a legal structure that preserves income and assets that would otherwise be lost under Medicaid regulations. At first, my father was skeptical of the costs (yep, it doesn’t come cheap) and value of trusts. Our attorneys, along with one sister who worked in a law office, helped us understand the need. They educated us on the complexity of trusts. We learned what should be in a trust, how to handle the trust with a loved one with special needs, and how trusts should be structured for the family’s overall benefit.

All of the daughters were involved in the process. They were helpful, inquisitive, and stayed informed. We knew why creating individual trusts for each parent was important. We understood that the assets, such as the house and various retirement and pension accounts, had to be divided between two trusts. This process also helped the entire family understand what my parents wanted to happen for their heirs. They wanted the inheritance to be equitable among the daughters and assets preserved for the family. They also wanted less to go to the government, and for us to steer clear of the difficulties and costs surrounding probate. Yet, the more I reflect on it, they truly wanted a clear path how their assets would flow from their estate directly to their “girls”.

A Big Thank You to My Dad

Susan Chanley with her father, Bob Bumstead, worked together on retirement and estate planning issues for the family.

As the executor of my parents’ will and trustee of their estate, I can’t thank my father enough for his foresight and love. He knew one day I would need to know about his retirement and estate planning goals. This responsibility is personal and tough and comes with serious consequences if you don’t get the financials right. That’s what the planning was about.

My parent’s love for each other as they journeyed through retirement, shouldered major health issues, and had abundant love for their children and grandchildren kept the family together. Their purposeful retirement and estate planning was a gift. I can assure you the path would have been rocky, more difficult, costly and frustrating without their specific estate plans in place. To add to that, the overarching structure and legal appointments made it much easier to pass along assets, sell their home and handle other estate and long term care issues that undoubtedly came to light.

Being a trustee or an executor of an estate is never easy. Think long and hard if you are up to the challenge. There are always issues that “pop up”. They are maddening and you really don’t know what to do with them. However, the road is smoother with support from your family and the professional assistance from a trusted adviser, accountant and legal counsel who can guide you and save much heartache along the way.

My Advice to All Families: Talk About Retirement and Estate Planning!

For all families, I urge parents to trust in their children, or at least one child, or responsible, close friend. Take the first steps and talk to your grown kids. Create trusts inside the family. Address your family’s financial situation and your plans for long term care as you age. Invite your most loved ones to an abundant family dinner and start to talk. (Okay, don’t talk with your mouth full. Didn’t your parents teach you manners?)

For adult children, I beg you to gently push your parents into these most important discussions. Help them secure a happy retirement and pave the way to ensure the smoothest, most beneficial estate distribution and legacy for the family. Along this journey, you’ll want to have many more talks about these issues and bring in the experts. It’s all about creating a loving and strong legacy. You’ll remember and cherish long held memories, laughs and traditions, and carry them on to future generations. That’s the best gift my dad gave me.

Cherished Memories

In my case, there was a special tradition with my dad. I’d bake and deliver Biscotti di Vino (an ugly, yet yummy cookie) for Father’s Day. I fondly remember all the times we dipped them into a nice big glass of red wine together. We’d share a laugh or two, get some fatherly advice, and remember our family and our many great times together. Happy Father’s Day, one and all.

Recipe from The Retirement Kitchen: Biscotti di Vino

Preheat oven 350 degrees F; have 2 baking sheets ready. Ingredients:

4 ½ Cups all purpose flour

¾ Cup of sugar

1 tsp. of baking powder

2 tsp. of salt

1 Cup of vegetable oil

1 Cup of red wine

Combine 4 Cups of flour, the sugar, salt and baking powder. Make a well in the dry ingredients. Pour oil and wine into the well and begin mixing the dough.

It will gradually become a soft dough (that looks ugly; don’t judge me or the dough!). Knead in the other ½ C of flour to keep the dough from sticking. Divide dough into about 40 pieces and roll the pieces into 4 to 5 inch ropes. Form the ropes into rings and/or pretzel shapes. Pinch the ends of the rope firmly together. Have fun! Bring your kids into the process. They’ll love playing with the dough.

When needed, dip biscotti into a pleasant red wine and take a bite with someone you love. The cookies may be ugly but they are tasty. Here’s to talking about retirement and estate planning with your dad!

For other fatherly retirement and estate planning advice, check out these resources: